Data center construction is running at $50B a year. Illinois and New York just closed their doors to new projects.

An electrical sub bidding an Illinois data center project just had the developer's financial model shift beneath it. Governor JB Pritzker announced June 5 that Illinois is suspending its data center tax incentive program for two years. Effective July 1 — ten days from now — the Illinois Department of Commerce and Economic Opportunity stops processing new applications. Projects with signed DCEO incentive agreements in place before July 1 are grandfathered. Everything else is in a holding pattern.

That's one half of what's happening at the state level. On June 4, New York's legislature passed the Responsible Data Center Development Act: a one-year moratorium on environmental permits from the Department of Environmental Conservation for any new data center drawing 20 megawatts or more. The bill is on Governor Hochul's desk. As of this week, she has not signed or vetoed it.

Together, these moves affect two states drawing significant data center investment — at a moment when the broader market is running at a $50.7 billion annualized spending rate, up 28% year over year, according to the Associated Builders and Contractors.

What's specifically at risk

In Illinois: any project that hasn't locked in a DCEO incentive agreement by July 1 loses access to the program for two years. Those subsidies were part of why Illinois became a serious data center market. If a developer's pro forma included them and now they're gone, the project may pause, shrink, or move. If you're an electrical or mechanical sub with Illinois data center prospects, find out this week whether the owner has a signed DCEO agreement. That's the question the project's financial viability turns on right now.

In New York: 28 large data center projects in the state's ISA grid queue — representing 9,682 megawatts of planned capacity — are waiting on Governor Hochul. If she signs, any project that hasn't broken ground and doesn't already have DEC environmental permits issued is frozen for one year. Projects that have already started construction are exempt.

Where the work is actually going

Neither state was the largest market. Texas currently has 6.5 gigawatts of data center capacity under construction and is on pace to overtake Northern Virginia as the world's largest data center market before 2030. Power availability is the deciding factor: Texas has cheap, abundant generation capacity and a permitting environment that hasn't moved to restrict new builds.

Ohio, Indiana, Georgia, and Nevada are also absorbing projects. The pattern is consistent — construction follows power availability and regulatory predictability. Policy friction in two major markets is accelerating that sorting in real time.

If you want to get into this market, Meta is paying for it

Meta launched America's Workforce Academy this month: $115 million committed to free skilled-trades training for electrical, mechanical, and piping workers on data center construction, with guaranteed job placement through Meta's contractor partners. The program is starting in Indiana, Louisiana, Ohio, and Texas.

Data center work rewards shops with demonstrated experience in liquid cooling systems, high-density electrical, and commissioning under tight schedule pressure. The credential trail matters when you're bidding against established specialty contractors. This program creates it. If your shop is in one of those states and you want to build data center capacity, it's worth running workers through the academy.

The read

The data center construction market is not slowing down — it's sorting by state. A $50 billion annual spending rate reflects committed capital from operators who have to build this infrastructure. State-level policy friction in Illinois and New York doesn't kill that demand; it redirects it.

For contractors: verify the DCEO incentive status of every Illinois data center project in your pipeline before July 1. For subs evaluating where to invest certifications, equipment relationships, and crew training for this work — Texas, Ohio, Indiana, and Georgia are where the pipeline is clear.

We tracked how broadly AI adoption is growing across the construction industry — data center construction is the single sector driving most of the backlog growth behind those numbers.

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Construction AI Brief covers how the AI market reshapes the commercial construction landscape three times a week. The data center build-out is one of our standing focus areas.